Hi all,
NEC4 option C
Does the Contractor have to comply with additional Scope through a Project Manager Instruction for works required outside the Site boundaries?
I’m aware of clause 27.3 however, we have a programme to deliver on our contracted Scope of works and this could but strain on the programme and labour force if the instruction is enforceable.
thanks in advance
Yes, they need to comply if the Project Managers Instruction is compliant with the law, applicable H&S requirements and is safe to do so. The PM may not be making the decision i.e. a third party may insist the additional works are carried out, or they may be a consequence of the current works. An example is if the works on site damaged a adjacent building/structure, as a result of using heavy vibrating machinery. The PM will need to instruct the Contractor to carry out repair works to the building/structure, even if it sits outside the Site Boundary limits. Cl27.3 is open in this respect, it does not reference the Site Boundaries/Working Areas. Cl.11.2.(20) allows the PM to amend the Working Areas, they need to include the amended area in the PMI to the Contractor.
The Contractor should review its resource levels and submit a Compensation Event quotation, impact programme and amended Activity Schedule, to the PM for acceptance/implementation. Cl.63.9 says that the Contractor “reacts competently and promptly to the event”, this is of course open to discussion between the parties involved. If you’re struggling to carry out the additional works due to low resource levels then notify and EWN in relation to the PMI, and discuss this with the PM. It’s in all parties interests to agree and implement the CE quotation and amend the Cl.32 Programme accordingly.
Another way of approaching this is; “where does it say the PM can’t instruct work outside the Working Areas?”. I don’t see it stated anywhere, but happy to be corrected if wrong.
A recent example of this is on a well know high speed rail line project from London to Birmingham (no names mentioned 
), tunnelling works can cause ground settlement over the tunnel route, minor damage may occur to properties above the route. The Client has instructed the major Tier 1 JV Contractors to carry out minor remedial repairs, as a consequence of the works. These sit outside the contract Working Areas/Site Boundaries.
I think it may be useful to also consider the definition of Site under clause 11.2(17). The Site is the area within the boundaries of the site and the volumes above and below it which are affected by work included in the contract. The boundaries of the site being given in Contract Data Part One.
Since the boundaries of the site are stated in the Contract Data, and are not subject to unless later changed in accordance with the contract, the PM cannot change the Site.
The Working Areas are the Site and parts of the working area (see clause 11.2(20)) identified in Contract Data Part Two. The Contractor can request adding to the Working Areas but the PM cannot unilaterally add.
It would therefore appear that the PM cannot instruct work outside of the Site.
It would seem sensible to have a discussion with the Client and agree how to proceed.
Hi Dave, thanks for the clarification. Cl.12.3 allows all parties to agree to extend the Working Areas via a supplementary agreement. I think herein lies a problem in NEC Contracts. In a situation where the PM must undertake critical works outside the Working Areas, due to a consequence of unforeseen circumstances (say they accidentally damage a surrounding building outside the site hoarding line). NEC is saying the only way the PM can instruct this is via a supplementary agreement to extend the Working Areas, to which the Contractor can decide not to agree. This would lead to a total deadlock that the PM is then powerless to resolve. How would you move forward presented with this situation ?
HI Both,
Thanks so far for the feedback
Where is the line drawn regarding instructing works outside the boundaries, could the PM issue an instruction to work 5 miles down the road to do a trail hole for other associated works that has nothing to do with current Scope but is needed for a wider programme of works?
Going a long way back to my Uni days, my answer is no. Any instruction is enforeceable if it is in connection with and required for the performance of the original works contracted between the parties. The simple example our lecturer gave was a contract agreed to build a single house where a front door wasn’t included. An instruction to include a front door is enforecable and the contractor must comply. The Client cannot enforce an instruction to build a second house (should the contractor not wish to do so) as this has nothing to do with the original contract intent or performance.
Folks, an interesting topic.
Firstly, I think there needs to be consideration as to whether there is a restriction placed upon the PM when instructing a change to the Scope that includes work outside of the boundaries of the site?
Clearly, work outside of the Site and of the Working Areas is considered by the contract because the Schedules of Cost Components identify the Defined Cost of work outside, such as manufacturing and fabrication, and design, etc. Also, clauses 4 & 7 include for things happening outside of the Working Areas.
So is there a restriction on how the PM can change the Scope?
The Scope is defined as information which specifies and describes the works and constrains how the Contractor Provides the Works; the works are identified within the CD1 and this description has to describe the project as a whole. Therefore, changing the Scope to include work outside of the boundaries of the site would bring that work into the description of the works in exactly the same ways as it would bring in any other additional work, I can’t see anything to prevent this provided the work becomes part of the works. If they don’t then I think that would be a restriction.
So if the works were described as road scheme and the PM instructed a change to the Scope to include the construction of a new wind farm to be built in a field adjacent to the Site, maybe the Contractor might have good grounds to refuse this as it would be unlikely to be becoming a
part of the works, also it would probably be seen as a material change to the original contract, but nothing in the contract actually precludes this however I am not a lawyer so don’t quote me on that.
As stated in some of the responses, the Contractor has to obey the instruction and Provide the Works accordingly, however there might be a problem with access to the new area if it is not owned or controlled by the Client - see 33.1.
If the instruction includes additional work in an area which is not the Site then the Client must either be able to give or arrange access to the area under 33.1 or, the Scope in the PMs instruction must constrain the Contractor by requiring them to obtain approval from Others so that the work can be done - 27.1. In this case ‘approval’ could include agreeing access, etc.
There are many references to the Site within the contract and they impose various obligations upon the Client and the Contractor and they constrain things to a defined area [access - 33.1 + 60.1(2), physical conditions within the Site - 60.1(12), weather measurements recorded at the ‘Site’ if stated in CD1 - 60.1(13), discovering objects within the Site - 73.1, termination 92.2 - and many more] but I still don’t see anything to prevent the PM from instructing work outside of the boundaries.
I think there are other considerations such as the liabilities and insurances covered under clause 8, which the Client and Contractor might be taking on in doing the work so these must be looked at and understood and possibly altered where necessary. What about a Defect in that work, how would that be corrected and what if access is needed to correct - see 44.4?
Ultimately what is described in the question is a compensation event under 60.1(1), so the pressures on programme, etc, should be compensated for, especially any additional risks which the Contractor takes on from working outside of the Site - 63.8. It must be remembered that a CE cannot change the conditions of contract, unless the contract allows for such change, no change to the conditions of contract is possible without mutual agreement under clause 12.3 .
Thanks for the responses. Where do we sit on this now ? There appears to be two of us believing that the PM “may be able to” instruct works outside the Working Areas/Site Boundary, and two believing this can’t be done.
LU, if the contract does not expressly prevent it, then I can’t see why it can’t happen, on the proviso that everyone is clear on their liabilities under the contract.